I believe that it is socially uncool to own one(I am not kidding) in addition to them not having many established IP's.

People that say the system doesnt appeal the Japanese are full of shit. The majority of the best sellers for the PS3 are multi platform save for GT5 and HS Golf.

The Japan seem to frown on non- Japanese countries in the video game industry. Not many western games get bundled over there, for example (off topic, but Ratchet and Clank: Going Commando was the first!). This is just what I've gathered from observations, however. I think that its kinda dumb (if it is true), because a lot of them miss out on great games only on the 360.

Wait I found a reason. The japanese revived the console market after the western market killed it right. So if the 360 was to be a winning console the other console makers would likely try to mimic the 360s success. Now if all the consoles were western dominated maybe for some weird reason the japanese thought the market would crash again. Then after time this started to just turn into a taboo that american consoles are bad.

The issue was that the Japanese would of gladly recieved the orig. Xbox had it been a little nicer looking, and had more Japanese fare.

The Xbox 1 did rather well the first 3 months on the market, selling over 300,000 units (give or take). Which was pretty impressive.

The issue is, aside from the initial launch, everything else sucked: it had no games, and got a very bad image due to the crappy design of the big black box.

Fast forward to a sleeker, better X360, and it still faces a bad battle because the predicessor was so nasty. Had Microsoft of launched with the 360 (in terms of games, and design), I think Microsoft could of carved a good, 3-5m LTD userbase in Japan for the Xbox 1, and woulda well been on their way to fighting Sony tooth and nail for #2 in Japan.

The 360 has seen good succuess when it has good games, but it still has marketing and brand nightmares: The people love the innovations of the Wii, and the brand name appeal of the PS3. Hardcore gamers like the 360, but it has yet to woo over core gamers in Japan. Fortunately, the Multi-Platform lineup has kept the 360 viable this year with Armored Core, Devil May Cry, and even last year's Sangoku Mousou 5, but the 360 needs more.

The 360's last hurrah is this year. If it can show positive gains this year (200k+), I think the 360 stands a good chance of setting a positive precident for the next Xbox in Japan. It won't have the horrid image of the Xbox #1, and will atleast of had the positive backing of good J-Devs like Capcom, Namco, and Mistwalker.

But I wonder how the next 3 years will transpire: MS still seems intent on wooing J-Devs like Nippon Ichi, and now we believe that MS keeps signing time-exclusive deals like with Tales of Vesperia. So this year will be exciting. I keep updating my weekly analysis of the 360 and Xbox's sales in Japan. It's trending OK this year, but not fantasic (similar to 2006 + about 20%). Big question is if NG2 and TOV can get the 360 to break 7.5 or 10k/wk in Japan.

DO DO DO !

Seriously though, the Xbox360 has a reputation it needs to shake from its ugly, big, fps oriented ancestor. Even now, with its vast and varied game library, people (mostly the haters) still like to label it as a fps oriented system. 

Microsoft is making baby step progress in Japan. People say they should "give up" (mostly the haters) in Japan, but MS is probably looking at the big picture and not just current market positions.

I think it would be something if they can get a million Japanese to buy the thing before the consoles life is over. 

Im sure both MS *AND SONY will learn alot from this generation console war. The battle between the 720 and PS4 should be pretty interesting.

Yeah, the original Xbox was pretty much a "Fuck You" to the Japanese gaming audience. MS didn't really care about Japanese developers, the controllers were the size of a bear, and the console was like a Chevy / Ford / Dodge pickup. It just doesn't work outside of America.

Also, a lot of the anti-competitive nature of Microsoft doesn't really help outside of America where people are much more brand-conscious. In America, people are a lot less caring of brand name.

The Japanese reject American consoles.

 I remember all the hype surrounding the first Xbox. Supposedly MS did all this research about what gamers wanted and had focus groups and gamer input and yadda yadda. Then the thing comes out and the controllers were ridiculous. If they got all this input you'd think someone wouldve said something to them about that. Either that or all their focus groups consisted of gamers the size of basketball players.

The original XBox sold much faster the 360 did, Japanese XBox owners were dissapointed there was no focuss on Japanese orientated games. Due to Microsoft's and XBox' bad reputation the 360 sold much slower.

But the release of Blue Dragon eventually pushed the platform beyond the XBox install base. People still aren't confident on the device due to mass hardware issues and such. The PS3 being a better deal for the high end market (value for money, both in terms of default features and anticipated games), the Nintendo Wii and PS2 being better products for the low end market. The 360 is on life support for Japan, but it's really a braindead platform.